The consolidated assets held by Serbian banks fell 0.9% y/y to RSD 3,933bn (EUR 34.4bn) at end-July after inching up 1.1% y/y the month before, due to falling domestic credit, central bank data showed. The ratio of bank assets to full-year GDP retreated to 104.6% at end-July from 117.2% a year earlier and 122.0% at end-2012.
Domestic credit, which makes up 56% of the banking sector assets, swung to a 1.8% y/y drop to RSD 2,216bn at end-July from a 1.0% y/y increase the month before dragged down by declining loans to companies.
Corporate lending contraction deepened to 5.9% y/y to RSD 1,062.5bn in July from 2.2% y/y the month before as budgetary funds earmarked for subsidised loans have been spent in the first quarter of the year. Loans to households edged up 0.8% y/y to RSD 673bn following a 1.9% y/y growth in June.
The annual growth of banks’ lending to the government sector slowed to 10.2% y/y to RSD 297bn in July. The trend will likely continue reflecting the increased fiscal consolidation efforts.
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